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Friday, January 20, 2017

MJ
Bogatin (“Bo”) of Bogatin, Corman & Gold, is an Arts and
Entertainment Attorney in San Francisco. He is also Co-President of
California Lawyers for the Arts. www.calawyersforthearts.org. Bo is available to answer some of your questions surrounding the business of Art Licensing. - THANKS BO!

I've known several artists approached by VIDA. I'm attaching their Artist Contract and am wondering what you think of its terms? Montana

Thanks for your question, Montana. I have had occasion to consider a few different online licensing websites. Some, like VIDA, promote themselves as a “Manufacturer on Demand.” I doubt that they themselves are manufacturers. They are more likely, the “intermediary.”

I can see how an online website licensing would be an attractive business model to entrepreneurs who have relationships with manufacturers (or their US tradeshow representatives). If the website can sign up lots of artists, it is possible that they can make a lot of money from the sales of products with artists’ designs, whether to the public – or even more likely, to the very artists whose artwork has been licensed. Many artists just want to see their work featured on products, from placemats to scarves. If the online licensee can entice the artists themselves to purchase enough of a given product – and the manufactured product prospects are unlimited -- current digital imaging allows the manufacturer to easily change out designs. Small quantity orders of a few hundred units can be profitable with overseas, non-union manufacturing, with a generous mark-up on the re-sale of such inventory to artists -- and possibly to retailers.

As for the licensor artists, I suspect that this not an unduly expensive way to obtain a decent inventory of select products bearing their designs. However, I doubt that there are many commercial success stories generated from sales from these websites. If I am in error on this, I would like to be informed of it!

When I dig into VIDA’s, not only do I find some very objectionable terms, I also find an emphasis on asking the artist to invest in the purchase of models promoting their pending product line, and discounts available for purchasing $300+ of the merchandise. If every artist who signs up agrees to the marketing photos and a minimum purchase of select products with their very own designs, clearly, the business model has income potential to the purveyors if not the artists!

Upon signing up with VIDA and uploading two illustrations, it is my understanding that artists are asked to become “a featured designer on VIDA with a Curated Collection.” In conjunction with this invitation there is an ask for money summarized as follows:

To claim your curated collection, you can use one of two private codes listed. With “Code Curated 25,” the artist is invited to receive one professional lifestyle photo of a model wearing an item from your collection. Check out with $300+ worth of merchandise in your cart and enter the promo code, “Curated25” at checkout, and 25% will then be taken off your order. You will also get a curated collection page with one professional lifestyle photo of a model wearing an item from your collection, and at least one of your products product featured on the VIDA Shop All page with professional lifestyle photography.

If you select Code Curated40, you receive three professional lifestyle photos of a model wearing items from your collection. Check out with $900+ worth of merchandise in your cart and enter the promo code, “Curated40” at checkout, and 40% will then be taken off your order, and you will get a curated collection page with three lifestyle photos of a model wearing items from your collection, and at least one of your products featured on the VIDA Shop All page with professional lifestyle photography.

Again, this is an extremely limited offering since we can only offer curated collection upgrades to a small group of artists. Since we have limited space for curated collections, we are limiting the availability to upgrade your collection until just October 30th, only 4 more days.”

This promotional material is said to be “extremely limited,” but as far as I know, it has been posted indefinitely.

Of critical importance, as always for me, are the terms that are imposed by the website licensee on the artist who clicks “Agree.” As for the VIDA Agreement, http://studio.shopvida.com/terms-and-conditions , I have a number of concerns about its terms, many of which are wholly objectionable.

With reference to my prior Basic Licensing Terms bLAWg, http://annietroe.blogspot.com/2015/02/bos-blawg-what-should-be-in-art.html , note first that the grant of rights to any images uploaded is immediately “exclusive and perpetual.” This means that whether or not anything is made of the artist’s imagery, (and there is no guarantee that there will be!), the artist has no further right of use to it for licensing purposes!

Furthermore, the artist gives up any right to object to the way in which her imagery may be used on any given product – by itself or in combination with other imagery -- or the quality of the product itself!

While VIDA requires the artist to provide their photograph and biographical material, there is no obligation on VIDA’s part that it will post or use this information in conjunction with its promotional efforts on behalf of such artist. To the contrary, in an accompanying “Plain English Terms” explanation of the Agreement, VIDA makes clear that artist imagery may be used without a copyright notice or artists brand or logo. This not only deprives the artist of a key reason for licensing her imagery, but suggests to the public that there is no copyright claimed on the imagery used on the products, and the prospect of unlimited “innocent infringement” with minimal damage claims despite artist’s registered copyright.

A Ten Percent is offered on VIDA’s “Net Sales.” Revealingly, this 10% is offered as a “sales commission” to the artist rather than a royalty. By calling it a “sales commission,” clearly VIDA expects the artist to be the seller – not VIDA or retailers to which it is ostensibly marketing the products.

The Net Sales definition includes “discounts” and “bad debts,” neither or which would the artist have any control over. Too bad if it was Uncle Lenny who failed to pay for those 500 units that he bought wholesale for resale to retailers of his acquaintance(!) And to make matters even worse, the VIDA Agreement expressly rejects any obligation to verify its listed sales information or an audit, both of which are standard provisions in legitimate licensing deals.

If these particular provisions are not bad enough, VIDA then states that it “reserves the right to change these terms at any time.” Somehow, I doubt such changes will be for VIDA artists’ benefit!

It is my understanding that there are a number of such online businesses including Society6, RedBubble, Art of Where, Minted and Bucketfeet. If you have questions about their contract terms, I’d be pleased to comment on those as well.

Have a legal question? email it to info@AnnGraphics.com.
I will forward it to Bo. It might be a blog post! You can search "Bo's
bLAWg" to read more posts. I am looking forward to your comments and
thanks for sharing this great information on social media.

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Friday, January 6, 2017

First tell us a bit about yourself.
I grew up in Salem, Oregon. It was a wonderful childhood full of 4-H, beach combing, boating and fishing with my Dad and brother, and crafting and painting with my mother. I graduated with a combined B.S. in journalism and marketing. After a few years at a Seattle ad agency, I moved without a job to NYC to expand my horizons and see what I could do with my life. I worked for a major travel publisher for the first five years and travelled the world, usually taking 10-12 international trips a year. It was a blast! When I went to work for the president of Macmillan Publishing, I began licensing an English as a Second Language television course in conjunction with the USIA (United States Information Agency). This is where I learned about the global power of licensing.

I pursued a job at United Media (the licensing division of United Feature Syndicate), where all the licensing for Peanuts was done at the time. After being hired, I was asked to work on all the lesser known characters, including Nancy and Sluggo, Marmaduke, Over the Hedge and Dilbert. I built the Dilbert business from its infancy into the first corporate global icon, generating more than $200 million a year in sales in more than 45 countries.

After seven years at United Media, three years as Vice President Licensing, I decided to start my own business and moved back to the West Coast, where I also started my family. My husband, Ric, and I have a son who just turned 12. At first I worked under the name J’net Smith Inc. and in 2006, I created All Art Licensing.

Would you please summarize all that you do!All Art Licensing has two divisions, the ABC School of Licensing, which is currently still in development and includes all of our video and audio products, live classes, eBooks, templates and other educational elements, and our personal services which fall primarily into 3 categories – coaching (I help you decide what needs to be done and teach you how to do it yourself, often providing contacts and information), consulting (I do the work for you) and agenting (I occasionally still represent artists, cartoonists, brands, authors and other creatives to market their work to manufacturers, producers, retailers and others in the position to license their work).

I am first and foremost a brand developer. With all clients, whether artists, cartoonists, authors and other creators, I help them envision the big picture and then find the most efficient pathway to generate money with their creativity and IP (intellectual property). I can also help them do it. A lot of what I do is eliminate hours of unnecessary work with information, knowledge and connections. I love working with artists and getting them ready for the million-dollar deal, also helping them learn how to become less vulnerable and realize that they have the power to do anything they want!

Do you have employees/help?
Yes. I have a number of people I work with on a daily basis, both in my office and through virtual connections. In addition, I have strategic partnerships with designers, cartoonists, manufacturers, retailers, publishers, producers, attorneys, videographers, specialized agents, publicist, webmasters and other experts in their fields, whom I call on for all types of projects. No one is an island, you need relationships and the right connections to get the job done.

How does Agenting and or Consulting/Coaching work if an artist comes to you for help? What do you look for in an artist/character/brand?
When a creator comes to me they usually have an idea of how they want to work. If they are looking for an agent, they say so up front. Agents work on a percentage of the licensing revenue that they bring in for a client and the commission share can vary widely. I try to be very reasonable, and I take on only a few clients at a time. For consulting work, the client usually comes with an idea of what they are looking for and ask if X number of hours will do the job. I guide them, so that they get the most bang for the buck. Often what they think they need/want is different from what they actually need/want. We work through that in the most economical way possible.

The difference between consulting and coaching is that in consulting I do the work for the client, whereas in coaching I teach and guide the creator so that they can save money and do a lot of it themselves. Honestly, people have talents they aren’t even aware of...and I like to drill down to see what and how much they can do, and want to do. With the right guidance at those critical junctures, many people can do far more than they ever imagined! I have many clients who have been with me for years. They often come once or twice a year for direction and guidance, or for a specific purpose, such as advice on a contract or to prepare for a negotiation. Whatever help they request and need, that’s what I do.

Artists sometimes come to me for coaching, but if I see they need basic licensing education before entering into the licensing arena, this is why I am developing the ABC School of Licensing courses. The video courses and eBooks provide very detailed industry knowledge and ‘how to’ information at a price-point that the average artist can afford. I wouldn’t want to steer an artist toward investing in personal coaching, if they can get the information in a more economical format.

What I look for in an artist/character/brand varies greatly. I am very interested in artists and designers with a specific style and bent, especially those who are on the cutting edge of trends or those who cover a multitude of themes in their work. It’s really exciting to find prolific creators, who also have technical skills. For characters. I look for a well-thought-out concept that has a unique niche. Whether art or characters, knowing your target audience is key. And, of course, I love finding those creators with pure raw talent.

How has the Art Licensing business changed over the years?
Oh, it’s changed quite a bit since I started. First of all, there is a lot more information available to artists wanting to get into this business. But I find that creators need more help than ever sorting through the information, identifying what’s valuable (will make money) and making sense of it all. A coaching session 1-2x a year can help a great deal, especially when you have decided to market yourself and not utilize the services of an agent. Or to help you find the right agent.

Second, there is a lot more competition in the marketplace today with more artists than ever wanting to get into the art licensing industry, while many manufacturers continue to be risk-adverse and scared to try new artists and brands.

Third, the technological advances in the last ten years have made a huge impact on what you can do as an artist. From being able to create your own website and product store to print-on-demand manufacturing opportunities and the ability to broadcast art, cartoons and all types of content to the world platform vs. a local stage. Again, literally, mind-bogglingly amazing! It creates a huge playing field, as never experienced before. For those who are up to the challenges, it’s incredibly exciting.

What sort of resources do you offer?
I think one of the biggest resources All Art Licensing offers, in addition to our training, strategic planning, brand development, contract advice and negotiation services—to name a few—is our eighty free Minicourses available on our website. Each one is a question I answer, from artists around the world – a kind of bite-size class available all day, every day for everyone. Scroll through the questions and I’m sure you will find something of interest that you can learn from. I find many creators, that are new to licensing, don’t even know what questions to ask and which questions and answers will be most valuable. The Minicourses give you a fantastic place to start and everyone can get a feel for the quality and type of information and advice I provide. We are also offering a great deal of information through our social media platforms.

Any great news you would like to share?
Yes, as a matter of fact, All Art Licensing is creating more training courses and will have more products available in more different learning modes than ever (streaming, video, audio, chat, conferences, etc.), under our new moniker of ABC School of Licensing (A=Art, B=Brands, C=Characters), so please watch as we develop this over the coming year. And I would love to hear from your readers what challenges them and what they want to learn about most.

Any advice or information you would like to share?
I would recommend creators get advice on how to grow their business sooner rather than later…and focus. It’s amazing what you can achieve when you focus, execute and then move on to the next target, rather than taking a shotgun approach and just seeing what you can hit.

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About Me

Art for Stuff - Art makes me tick. I am an artist, illustrator and graphic designer.
As long as I can remember, I have been drawing and making things. Took EVERY type of art class I could and went to Iowa State University and studied art & graphic design.
​​LOVE mashed potatoes and gravy. Chocolate is a very close second. I have enjoyed sports all my life, right now the sport of choice is golf. Love a good cause. Red VW bug driver.

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